01 Aug 2011 Debt Ceiling Fiasco Ignores Real Problems, by Charles Butler
Just like when the ringmaster sends in the clowns, Americans watched the recent legislative circus in Washington in uncomfortable shock as lawmakers blustered to an accord on increasing the nation’s debt.
About the only thing the debt crisis did effectively was push Obama’s wars, lack of job creation (and further stagnation of the economy) and the sex scandal of Representative David Wu (D-OR) to the back of the media queue.
The agreement to reduce spending by just a trillion dollars over the next decade — after raising the debt limit to around $16.4 trillion — is akin to emptying an Olympic-size pool with a bucket during a rainstorm.
And what the politicos agreed to doesn’t address entitlement and tax reform.
Obama’s agenda has thus far taken the economy past that ditch he said Bush drove it into and put it over a cliff. The business community is understandably scared. In a recent company conference call, for example, Wynn Resorts CEO Steve Wynn complained:
[T]his administration is the greatest wet blanket to business, and progress and job creation, in my lifetime… And those of us who have business opportunities and the capital to do it are going to sit in fear of the President… And, until he’s gone, everybody’s going to be sitting on their thumbs.
Wynn, a liberal, courageously said publicly what other CEOs are reportedly saying in private.
Obama misled the American people about the consequences of not raising the debt ceiling. He claimed that Social Security checks would not be mailed, Medicaid and Medicare payments would stop, student loan payments would not be distributed and infrastructure projects would lack funds. In his opinion, jet owners who don’t pay enough taxes were the problem.
What’s really at risk is that credit rating agencies such as Moody’s and Standard and Poor’s will lower the nation’s AAA rating — ushering in higher interest rates. To put it in perspective, individuals with a lower credit rating pay higher finance charges to borrow money for a mortgage, a car payment or finance credit cards. Obama is risking national shame.
Revenues can still be collected without a debt ceiling increase. Some government programs might be harder to pay for, but the interest on our existing debt, Social Security and other things could still be paid. Spending cuts would be necessary, but that’s how average Americans deal with their own personal credit crises.
Representative Joe Walsh (R-IL) seemed to be the only Member of Congress willing to challenge Obama’s claim. The exchange Walsh had with Al Sharpton on MSNBC, where Walsh called Obama out, saying “the man’s got no shame,” was refreshing. This tea party-backed lawmaker further said:
I am not going to place another dollar of debt on the backs of my kids and my grandkids unless this city structurally changes the way they spend money.
Private jet owners keep the economy growing more through the businesses they run and investments they make than through the taxes they pay. The real problem appears to be a lack of people in the Obama Administration who understand how business and commerce work.
To spur the economy, repeal Obamacare. Make amendments to the tax code to reform corporate taxes in ways that will allow companies to bring overseas profits back to America for reinvestment rather than keeping them banked abroad as they are now. Reform entitlements and pay back the funds borrowed from the Social Security Trust Fund.
Multiple wars, illegal immigration costs, foreign aid and pork-barrel projects are just the beginning of looking for ways to curb excessive spending.
Obama and his liberal supporters unnecessarily scared the elderly, students, pensioners and average citizen who don’t understand how the debt ceiling vote affects their lives. Citizens need to educate themselves and they need to hold their respective representatives accountable for supporting the deception.
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Published by the National Center for Public Policy Research. Reprints permitted provided source is credited. New Visions Commentaries reflect the views of their author, and not necessarily those of Project 21, other Project 21 members, or the National Center for Public Policy Research, its board or staff.